Lockstep compensation is as much a part of most Big Law firms in Britain and some other jurisdictions as the law firm art and foyers. However mega-firm Clifford Chance is looking at changing all that with a review that is placing more attention on merit-based compensation rather than the lockstep system.
Clifford Chance is not announcing specifically what it will be doing yet, but it is changing the way things are done following the appointment of new managing partner Matthew Layton who has commenced a review of the firm’s management structure.
Lockstep compensation focuses on seniority rather than merit and has been under increasing scrutiny by many firms in the increasingly competitive legal marketplace.
Clifford Chance have already had a record year with records being broken in the last financial year and the firm’s management are not about to see that change any time soon.
As Law 360 report the firms has benefited from global transactional growth.
In July, the firm announced that it had brought in revenues of $175 million in the prior year, marking a record year for revenue and a 7 point jump over the previous year’s intake.
The growth in revenues for firms using the lockstep compensation system would not result in a boost in compensation for individual rainmakers, Law 360 report. Most U.S.-based firms have shied away from the lockstep system in favor of merit-based regimes.
A change to Clifford Chance’s compensation system would fit with the reform-minded ethos of Layton, who was instrumental in a major reshuffling announced in July that ousted the firm’s previous management committee in favor of a new executive leadership group.
The new system slimmed down the firm’s cabal of executive leaders from 16 to 12, reflecting Layton’s ambition to make the firm’s decision-making process less complex by reducing the number of people involved in key decisions.
A number of German partners are to leave the firm following the firm’s largest branch review in years as firm separately kicks off global lockstep review Clifford Chance (CC) has confirmed several partner exits in Germany are underway following its largest regional review in years, with the exits coming as the firm has kicked off a review of its firm-wide partner remuneration. The magic circle firm declined to comment on how many partners have already left but said the exits…